Integrating Multiple Theories of Corporate Governance: A Multi-Country Empirical Study.

In this paper we integrate agency, resource dependence, institutional and stakeholder perspectives of corporate governance, to suggest that each theory holds good in a different regulatory and competitive environmental context. Our hypotheses deal with the impacts of such varied environments on both the absolute and relative corporate governance standards of firms, in a country. We find support for seven of our eight hypotheses in an empirical analysis based on 418 firms and 12 countries. Our findings indicate that in some environments regulatory processes have a greater role to play, thereby establishing the importance of institutional and stakeholder theories of corporate governance, in such contexts. While we did not find a main effect for the competitive environment on the absolute corporate governance standards of firms, the competitive environment interacted with the regulatory environment to have a significant effect, demonstrating thereby the importance of agency and resource dependence theories. The interaction of the regulatory and competitive environment also had significant effect on the relative corporate governance standards of firms. Implications for policy makers, and practitioners are discussed, and directions for future research are elaborated upon.